Marten, J.:— This is an appeal by the defendant Company from the judgment of Mr. Justice Macleod, dated the 24th February, 1919, in favour of the plaintiffs, the Bombay Municipality. The case arises out of proceedings under the Land Acquisition Act, 1894, for the compulsory acquisition of the defendants' land by the Bombay Municipality for public purposes. The real points before us are whether in law a binding agreement as to the amount of the compensation can ever be made between the Municipality and a land-owner, before the Collector has made his award. If so, has such an agreement been made in the present case, and how is it to be enforced.?

2. The agreement relied on by the Municipality is contained in two documents of the 12th September, 1917, the first being what is alleged to be an offer on behalf of the defendant Company, and the second being an acceptance by the Municipality of that offer, which acceptance was subsequently communicated to the defendants at a Meeting before the Collector on the 14th September. The precise terms of these documents are, I think, material. The first document is a letter written by the Secretary of the defendant Company to the Executive Engineer of the Municipality, and omitting formal parts is as follows:—

“Acquisition of Company's property, Armenian Lane, Fort.

With reference to the interview our Engineer Mr. Vakde had with yon, I have the honour to state that the Company is willing to accept without prejudice the sum of Rs. 1,45,517, inclusive of 15 per cent, for compulsory acquisition, and cost of the chimney.’ The amount will be subject to deductions of the capitalized dues to the Collector and of the casements of the neighbouring properties if any”.

The acceptance of the Municipal Commissioner is as follows:—

“Discussed with E.E Compared figures with the original estimate. I approve of the case being settled on the conditions stated in the last letter from the Fort Press Company for Rs. 1,45,517”.

3. The plaintiffs allege in para. 18 of the plaint that these documents amount to a contract between the plaintiffs and the defendants, “that the defendants shall not claim a sum more than Rs. 1,45,517 as compensation for their said premises in the said land acquisition proceedings, and that the plaintiffs shall pay to the defendants that amount for compensation only, whatever award is made in the said proceedings, and that the plaintiffs shall pay the said amount to the defendants even if the award awards a less sum for compensation”. The trial Judge has accepted this view, and has granted consequential declaratory relief, but has not granted any injunction.

4. I should explain that the words “without prejudice” in the letter of the 12th September, 1917 were withdrawn before the Collector on the 14th September and may be disregarded: and that the reference to the cost of the chimney is made clear from previous correspondence and may also be disregarded. The reference to

“deductions…of the easements “refers to the fact that any adjoining owner who could establish an easement over the property would, under the Land Acquisition Act, be entitled to be paid an appropriate sum out of the total compensation for the property. It would appear, however, from the Collector's notes' that all claims but one have been disposed of and that in that one case the adjoining owner would prefer to retain his easement of light rather than be compensated for its loss. The “15 per cent, for compulsory acquisition” refers to the amount payable under that heading, by virtue of section 23(2) and section 15 of the Land Acquisition Act. The reference “E.E”. in the memo of the Municipal Commissioner is to the Executive-Engineer.

5. At the Meeting before the Collector on the 14th September, 1917, both parties were represented, and the Collector's notes shew that the solicitor for the Municipality put in as Exhibit C the above letter of the 12th September “shewing that the Company has agreed to receive Rs. 1,45,517 inclusive of the 15 per cent, for compulsory acquisition and the easement claim if any by the holder of adjoining properties”. Mr. Vakde (the Company's Engineer) explains that the term ‘without prejudice’ occurring in the letter has no longer any force as the Municipality has accepted the proposal”. At that point, therefore, the parties would seem to have been in complete agreement. The Company at any rate thought so, as their resolution of 22nd September speaks of the amount of Rs. 1,45,517 having been “fixed” in accordance with an arrangement made by their Engineer with the Executive Engineer and that “an official letter was written on the 12th September to the Executive Engineer conveying acceptance of the said offer on behalf of the Company. The same is hereby noted”.

6. It was not till the 23rd October that the Company by its solicitors sent the following letter of with drawal:—

“Re: Acquisition of the property of the Fort Press Company, Ltd., situate at Armenian Lane.

With reference to the letter, dated the 12th September last from the: Secretary of our client the Fort Press Company, Limited, to you, we are instructed by our clients to withdraw on their behalf the offer made by them in that letter for the sale to the Municipality of their property situate at Armenian Lane at Rs. 1,45,517- and accordingly beg to do so hereby”.

I regard this letter as very material in considering what view of the matter the Company took at the time as opposed to the various contentions which their counsel have since put forward.

7. Meanwhile, one other meeting before the Collector had been held on the 10th October and further meetings were held on the 31st October, 22nd and 29th November, and 17th December, apparently without formal repudiation by the Company of the alleged agreement. At the meeting, however, before the Collect-or of the 29th January, 1918, the Company was represented by counsel and contended that no agreement had been arrived at: and that even if there had been, that was not the proper place to decide that matter; and that they were entitled to lead evidence as to value. They also on the same day made a formal claim’ for Rs. 5,71,660 as compensation, and objected to the measurement made under section 8 of the Act. Thereupon, after some discussion, the proceedings were adjourned “by the Collector.

8. On the 12th March, 1918 the present suit was instituted by the Municipality. It will be noted that in para. 12 of the written statement, the defendants pleaded that the agreement, if any, “is void and of no effect. Neither party is bound by such an agreement”. As to this, the learned trial Judge, in dealing with the issues, says..—

“It will be noted that the defendants no longer contended that if there was an agreement it was void or that the agreement set up by the plaintiff was an agreement for the sale of the property in question”.

9. Out of the eight issues raised at the trial, the first six depended on whether there was an offer and an acceptance by the plaintiffs and the defendants or their duly authorized agents. Before us, Mr. Desai for the appellants only relied on issue No. 1. He admitted that if the Company's letter of the 12th September amounted to an offer, the remaining live issues Nos. 2 to 6 (inclusive) would be decided against him, as would also be issue No. 8. On this point, I entertain no doubt whatever that the Company's letter is an offer and not a mere invitation to make offers. The theory of an invitation is hopelessly inconsistent with, amongst other things, their own resolution of 22nd September and their own solicitor's letter of 23rd October; It accord-ingly follows that on this point I entirely agree with, the judgment of the learned trial Judge, and that consequently the defendants fail on issues Nos. 1 to 6 and No. 8.

10. This leaves only issue No. 7, viz., whether the agreement if any was merely arrived at for the purpose of proceedings under the Land Acquisition Act, and, if so, whether such an agreement can be specifically enforced by the plaintiffs against the defendants. But before dealing with this issue, I will, by way of warning, add that one must dismiss from one's mind the practice and procedure in England under the land clauses consolidation act, 1845, with its ample facilities for landowners to come to binding agreements with the promoters both before and after notice to treat has been served. To an English lawyer familiar with that Act, the question which I have referred to could have but one answer. But the Land Acquisition Act has been framed on such entirely different lines that it requires careful consideration before one determines what is and what is not permissible under it: and in particular whether the object of the Indian Legislature was not to keep all control in the hands of Government, and to prevent any financial agreements between a landowner and a local authority being arrived at unless the express consent of Government was obtained.

11. 1 think, therefore, it is material to consider what were the respective positions of the parties at the date of the agreement. Under the City of Bombay Municipal Act, 1888 (Act III of 1888), the Municipality have wide powers of acquiring land. Only section 517 was cited to us but, I think, other sections are material. Under section 61 (m) it is the duty of the Municipality to make adequate provision for (inter alia) the construction and improvement of public streets. This should be read with section 296 which gives wide powers to the Commissioner, subject to the provisions of sections 90 to 92, to acquire land for such purposes and to dispose of the same. Section 87 also gives a general power to the Corporation to acquire and hold land. In the present case, the defendants' land is required for what is usually, known as the Church Gate Street Improvement. This as will be seen on looking at the plan, Exhibit H. to the plaint, involves the widening of Church Gate Street, and the construction of a new street between it and Meadows Street to relieve the great congestion of traffic in this locality.

12. Subject to certain restrictions, the entire executive power for the purpose of carrying out the provisions of the Act vests in the Municipal Commissioner (see section 64) and he enters into contracts on behalf of the Corporation (see section 69). Under section 90 any land to be acquired for the purposes of the Act may be acquired by the Commissioner on behalf of the Corporation by agreement subject to the approval of the Standing Committee. In the present case, negotiations for that purpose began as long ago as August, 1916, but no agreement was arrived at.

13. Section 91(1) I will quote in full, viz.:—

“(1) Whenever the Commissioner is unable to acquire any immoveable property under the last preceding section by agreement, Government may, in their discretion, upon the application of the Commissioner, made with the approval of the Standing Committee, order proceedings to be taken for acquiring the same on behalf of the Corporation, as if such property were land needed for a public purpose within the meaning of the Land Acquisition Act, 1870”.

[This reference is now to the Land Acquisition Act, 1894, see that Act, section 2(3)]. That such an application was made by the Commissioner is pleaded in para. 3 of the plaint and not denied in the written statement.

Sub-section (2) of section 91 of the City of Bombay Municipal Act is as follows:—

“The amount of compensation awarded and all other charges incurred in the acquisition of such property shall, subject to all other provisions of this Act, be forthwith paid by the Commissioner and thereupon the said property shall vest in the Corporation”.

This sub-section does not say whether the Commissioner is to pay this sum to the Collector or to the landowner direct, but if the latter, it varies section 31 of the Land Acquisition Act under which the Collector is the person to pay the compensation, and in any event it would seem to vary section 16 of that act which provides for the land vesting absolutely in Government free from all incumbrances.

14. Section 92 gives power to dispose of property. Section 517 (h) gives wide powers to compromise. The financial provisions will be found in Chapters VII and VIII. Section 111 provides for the establishment of a municipal fund, and section 139 for certain taxes to be levied by the Corporation.

15. I think I have now stated enough to show that the Bombay Municipality have wide independent powers, as indeed one would expect in a Corporation of their importance: and that the intervention of Government is only necessary to enforce an acquisition, and even then it is the Municipality which pays and the Municipality which gets the land.

16. Turning next to the Land Acquisition Act, 1894, it is formally the Government which acquires the land [see sections 6(3) and 7] and it vests in them (see section 16). Further, although the land is acquired at the expense of the Municipality (see section 10), still it is the Collector who pays the compensation directly (see section 31). As I have already indicated, the above provisions are or may be modified in the present case, having regard to section 91 of the City of Bombay Municipal Act. Then under section 11 of the Land Acquisition Act, it is the Collector who has to determine, in the first instance, the amount of compensation which in his opinion should be allowed for the land. Further, he has to apportion the compensation between the various persons entitled [see section 11(3)] unless they agree amongst themselves as to how this shall be effected in which case he accepts such agreement (Bee, section 29). He also may have power to make arrangements with landowners [see section 31(3) and (4)].

17. Even when the Collector has made his award, that is not final. It only amounts to an offer by Government (see section 31 and Ezra v. The Secretary of State. If that offer is not accepted, any person interested may require the matter to be referred to the Court (see section 18). But the local authority is not entitled to, demand this reference [see section 50(2)]. and if the applicant has made a claim to compensation, the amount awarded to him by the Court is not to exceed the amount so claimed or be less than the amount awarded by the Collector (see section 25) Further, there is a very important power given by section 48 to Government to withdraw from the acquisition of any land of which possession has not been taken, subject to paying compensation for any damages thereby caused [see section 48(2)].

18. The appellants say that this section 48 enables Government to withdraw from the compulsory acquisition altogether, should they find the award too ex pensive, and provided of course possession has not been taken. They further rely on this section as shewing a want ox mutuality in the alleged agreement.

19. Under these circumstances, I think that at the date of the agreement in question, the position of the parties was as follows: The defendants had to part with their land having regard to the Government Notification of 23rd July, 1917 for compulsory acquisition. The Municipality was to get the land and also to pay for it. The only questions were the amount of compensation, and the positions of third parties. Possibly an ordinary agreement for sale could have been arrived at, and the Government Notification with drawn qua that land. But then the Municipality would not have got the benefit of the Land Acquisition Act and the clean title thereby obtained free from all incumbrances. It would, therefore, seem reasonable from a business point of view for the parties to complete the transaction through the medium of the Act and in that way deal with the claims of third parties but that this method of completion should not as between the Municipality and the Company affect the figures agreed on. Otherwise why trouble to agree the figures at all?

20. What then is the effect of the agreement? Ac cording to the present contention of the defendants, the agreement means nothing. It is a nullity. So, also, are the five resolutions of the Company, dated the 1st June, 14th July, 31st August, 7th and 22nd September, 1917. This contention seems to me wholly in consistent not only with their own solicitors' letter of the 23rd October, 1917 but also with the desire of the law to give such business efficacy to business transactions, as both parties must have intended it should have. Thus in The Moorcock, Lord Justice Bowen said as follows:—

“The implication which the law draws from what must obviously have been the intention of the parties, the law draws with the object of giving efficacy to the transaction and preventing such a failure of consideration as cannot have been within the contemplation of either side; and I believe if one were to take all the cases, and there are many, of implied warranties or covenants in law, it will be found that in all of them the law is raising an implication from the presumed intention of the parties with the object of giving to the transaction such efficacy as both parties must have intended that at all events it should have. In business transactions such as this, what the law-desires to effect by the implication is to give such business efficacy to the transaction as must have been intended at all events by both parties who are business men; not to impose on one side all the perils of the transaction, or to emancipate one side from all the chances of failure, but to make each party promise in law as much, at all events, as it must have been in the contemplation of both parties that he should be responsible for in respect of those perils or chances”.

21. If then the agreement was not a nullity, it seems to me that it was either (1) an agreement to make mutual admissions as to value, but that nevertheless the Municipality should give and the Company should accept whatever sum the collector or the Court might eventually’ award, or else, it was (2) an agreement definitely fixing the compensation as between the parties themselves whatever sum may ultimately be awarded by the Collector and with an obligation on either party to refund any excess or make good any deficiency as the case might be. In my judgment the latter is the true view. I think the intention of the parties was to arrive at a definite figure for better or for worse: and not to leave the matter open to the costs and uncertainty of future litigation before the Collector or the Court. Apart from the interests of possible third parties, this would present no difficulty, and in the present-case the claim of the only third party seems to be mainly for an easement of light to some privy windows.

22. Put, therefore, in another way, the agreement amounts in effect to a sale, as stated in the Company's letter of the 23rd October, but with this special feature, viz., that the purchase money was to be subject to a possible deduction for easements in favour of a third party, the amount of such deduction, if any, to be ascertained by the Collector or the Court under the Act. Or, again, if all this be written in full, the result is in substance what is pleaded in para. 18 of the plaint and asked for by way of declaration in prayers 2, 3 and 4.

23. It was urged that the terms so pleaded as being the effect of the agreement are not expressly stated in the agreement. It seems to me, however, that these terms may be fairly implied from the language actually used and the Surrounding circumstances, and that they ought to be so implied. I have already referred to “The Moorcock” as an illustration of an important implication being made. I may also refer to the Butterley Company, Limited v. New Hucknall Colliery Company, Limited(2), where in a lease of a lower seam of coal the Court implied a license to cause subsidence to the upper seam as otherwise about seventy per cent of the coal in the lower seam would have been left unworked, assuming the ordinary method of working, viz., the long wall system were adopted. There was no such express license in the lease, and the case was of the greatest importance in the coal mining industry as it governed many others and large sums depended on whether the implication could and ought to be made in favour of the mining lessees. In the present, case, the implication we are asked to make is to prevent what the Company at one time called “an offer for sale…Rs. 1,45,517” being turned into what they now say is a nullity or alternatively a non-binding admission as to value.

24. Then, again, if one tests the matter under the ‘Indian Contract Act, I think we have a “contract” within the meaning of sections 2 and 10 of the Indian Contract Act. As I have already held, there is here a proposal and an acceptance. I think there is also consideration within the meaning of section 2 (d) and (e). For instance, I think there are reciprocal promises to admit, that the true value is Rs. X. This, I think, relieves either party from the expense of calling evidence of value before the Collector at any rate so far as his opponent is concerned. In this connection, I may refer to section 50(2) of the Land Acquisition Act, under which the local authority are entitled to appear before the Collector and adduce evidence for the purpose of determining the amount of compensation.

25. If a similar matter arose in a suit for damages and the parties agreed on the damages, the Court under Order XXIII, Rule 3, would record such agreement and pass a decree for damages in accordance with the agreement arrived at. No doubt the Collector is not a

“Court”, but on any appeal from him to this High Court, the provisions of the Civil Procedure Code would apply so far as not inconsistent (see section 53 of the Land Acquisition Act). Consequently, it seems to me, that if this agreement had been made after the award of the Collector and after a reference made to the Court under section 18, it might have been open to the Municipality to apply that the Court should record the agreement and act upon it in accordance with Order XXIX, Rule 3, provided of course the interests of the other parties were not prejudicially affected. What real difference in principle is there then between such an agreement after the award and one before it? No doubt, when the Collector mates his award, that fixes the minimum, though not the maximum under the Act. But that seems to me only a matter of degree.

26. As regards the consideration, so far as the Municipality is concerned, I see nothing unlawful in what they have agreed to do. It did occur to me whether if the award was less than the sum agreed on, it would he ultra vires for the Municipality to pay more than the sum which the Officer appointed by the Act had fixed as the appropriate sum payable under that Act But having regard to the wide powers of the. Municipality which 1 have referred to, it seems to me that this point cannot fairly be maintained. Under section 91(2) the direction to pay, the “compensation; awarded” is to be “subject to all other provisions of this Act” and I think this preserves (inter alia) the power to compromise given by section 517. Be that as it may the Company gave up in the Court below its contention that the agreement was void: and I see no express allegation that this agreement was ultra vires the Municipality. It seems to me, therefore, that in any event, the point is not open to them now.

27. Under the above circumstances, I think the agreement here was for a lawful consideration and for a lawful object and was consequently a “contract” within the meaning of section 10 of the Indian Contract Act, provided it was enforceable at law.

28. Now, putting aside for a moment the question of specific relief, why should not this agreement, if necessary, be enforced in law by damages If for instance the defendants proceed as they did, on the 29th January, 1918, and in defiance of this agreement insist on a claim for some five and three-quarter lacs, and if they eventually succeed in that claim, why should not the Municipality be entitled to claim from them the difference between the compensation actually awarded and the amount which the defendants agreed with them to accept. I recognize that such an award might be due to other causes than the increased claim, but I will assume a case where it would be due to such a claim. I quite agree with the learned trial Judge that the question at the present moment is premature, because until the amount is finally fixed by the Collector or the Court under the Land Acquisition Act, the actual damages (if any) cannot be ascertained. But there is no difficulty in testing the matter now in that way in principle. It seems to me, therefore, that damages would in certain events be obtainable by the Municipality, and similarly, if the award was less than the sum agreed on, I think the defendants might recover the difference from the Municipality. It seems to me, therefore, that this contract is enforceable at law, namely, in damages.

29. It is, however, said that the power of withdrawal given by section 48 to Government might render the whole proceedings nugatory, and that consequently there is no mutuality. Counsel, however, for the Municipality, after due consideration, stated in Court that even if the Government withdrew, the Municipality would be obliged to pay the sum agreed on. It may be that the Municipality cannot now improve their position by this admission, if that was not the true legal position at the date of the agreement. But even supposing that the agreement is determinable in a certain event, that does not necessarily make it void now. One man, for instance, enter into a perfectly valid agreement for the sale of purchase of property, but with the proviso that the agreement should be void if the sanction of the High Court is not obtained within six months, or alternatively, if any land acquisition notice be issued within a specified time.

Accordingly, I do not think that section 48, even if” it applies here, prevents the agreement being a good one.

30. As regards the unreported case-Appeal No. 32 of 1917 — relied on by the appellants, I respectfully agree with the criticism of the learned trial Judge. The point there before the Court was entirely different and the observations quoted are obiter. The case is I think, of no real assistance in the present dispute.

31. The next and last point brings us to the actual relief which the learned Judge has granted, namely, the declaratory relief set out in the decree under appeal. In one sense I think that the precise relief to be granted at the present moment — apart of course from the first declaration as to the existence of an agreement — is a matter of small importance. I should imagine that any tribunal required to assess a money value, would readily accept the sum arrived at by the parties after a year's hard bargaining. I should have thought also that it would be open to the Collector to say that, in view of the agreement arrived at and the-admission thereby made, he would decline to allow the parties to adduce evidence in contradiction of that admission at any rate unless they could first show that they had been misled by fraud or by some very extraordinary circumstances. But there is not a hint in the proceedings as to anything “of that sort. Nor, indeed, is there any explanation offered of the Company's startling claim for nearly 5¾ lacs as against the previous agreement for under 1½ lacs. Supposing, therefore, that no further declaratory relief is granted, the probabilities would seem to be that the Collector would base his award on the figures of the agreement, and that if any appeal was brought by the defendants from that award, it would be unlikely to succeed. But that is a matter of speculation. On the whole, therefore, I think it is right to provide for contingencies, however remote, and to define clearly the views of the Court as to what the rights of the parties are under the agreement. In that view of the case, I think the declaratory relief is substantially correct and that it is no objection that substantive relief is not also given (see Dyson v. Attorney-General, and Specific Relief Act, section 42).

32. But to avoid any misunderstanding, I wish to say that the decree of the Court must not be understood as interfering in any way with the Collector. We are merely determining whether there was an agreement, and what are the rights of the parties under it. It is for the Collector to decide in his own way what the true compensation is and to be complete master of the proceedings before him. In this connection, it may be noticed that Mr. Justice Macleod expressly declined to grant an injunction, and I respectfully agree with the view he took in respect of that. Consequently, I think that we are not really infringing that very salutary general principle that where the Legislature has provided a special tribunal for determinig a particular dispute, the parties shall resort to that tribunal and not bring the matter to the High Court, at any rate until the tribunal designated by the Legislature has given its decision (see Grand Junction Waterworks Company v. Hampton Urban Council.)

33. I think, however, that the decree as eventually drawn up is open to possible misconstruction as to the intention of this Court not to interfere with the proceedings before the Collector. I think, therefore, that the last three declarations should be varied and run as follows:—

“And this Court doth further declare that upon the true construction of the said agreement and as between the parties thereto, (a) the defendants are not entitled to claim in the proceedings before the Collector under the Land Acquisition Act/any sum for compensation other than Rs. 1,45,517 or to proceed in the said proceedings on any other footing, and (6) the defendants are not entitled to any compensation in the said Land Acquisition proceedings beyond Rs. 1,45,517 after allowing thereout for deductions of the papitalized dues to the Collector, and of the easements of the neighbouring properties if any, and (c) that if the Collector awards as compensation a sum more or less than Rs. 1,45,517 the excess or deficiency will have to be adjusted as between the plaintiffs and defendants on the basis of the figures and terms agreed upon in the said contract and the sum found due as the result of such adjustment will have to be paid or made good to the defendants or the plaintiffs as the case may be”.

The rest of the decree should stand. I have suggested the variation of the original wording of the third declaration, as I am not satisfied that it is arithmetically correct in all contingencies, e.g, if the value of the easement varies with the value of the defendants' property.

34. In the result, I am of opinion that the decision of the learned trial Judge is right and, in the view I take and subject to the formal variations I have mentioned, this appeal should be dismissed with costs.

35. In conclusion I would add by way of warning that this case seems to me an exceptional one, and that, in my opinion, it must not be taken as encouraging the parties to come to the High Court over disputes in matters pending before the Collector under this Act. Nor do I see any adequate reason why the Collector should necessarily adjourn this proceeding pending such a High Court suit. No doubt he has done so in the present case out of courtesy, but one can imagine cases where important works might he thereby delayed to the great detriments of the general public.

Heaton, J.:— I need not recapitulate the facts which are fully stated in my learned brother's judgment. Two explanations are possible to account for the real meaning and intent of the acts of the parties. The first is that accepted by nay Lord the Chief Justice who heard the case, and by my brother Marten, that there was a binding contract. The second is that the parties agreed as to the value of the property and left every thing else to be dealt with by the award of the Acquiring Officer. In other words that there was not a contract, but merely a mutual admission of the value of the property. My mind inclines to this latter view. But I do not press it. If the former view is accepted, then I think everything stated in the judgment of my brother Marten follows. I, therefore, assent to the dismissal of the appeal with the suggested modifications in the declarations, and with costs.

Attorneys for the appellants: Craigie, Blunt & Caroe.

Attorneys for the respondents: Crawford, Bayley & Co.

Appeal dismissed.

G.G.N